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Budgeting & Saving

7 Places to Find Money for College

College can be a big expense. Unless you have parents who saved for your tuition and agree to pay, you will likely have to figure out how to finance your college education yourself. If you get creative with your financing, you can minimize your need to borrow funds for college.

1) Complete the FAFSA

Completing the FAFSA, or Free Application for Federal Student Aid, is your first step in looking for free money for college. Often, there are grant programs or scholarships that work in conjunction with this federal application. You may also be eligible for grants that you were not aware of. The FAFSA can help you automatically apply for these grants.

2) Win Scholarships via Alumni Clubs and Religious Organizations

Check for scholarships offered by alumni clubs or religious organizations that you or your parents belong to. I applied for a scholarship that was awarded by a club that my mother was a member of. It was a small scholarship of $500, but every little bit helps.

3) Apply for Grants via the Federal Government

One of the most popular places to get free money for college is the federal government. Yes, they supply funds for direct loan programs, but they also have grant programs. Grant money does not have to be repaid and can help you pay for tuition, fees and supplies.

Federal Pell Grant

The Federal Pell Grant is awarded based on financial need. The grant is awarded to low­ income undergraduate students. In some cases, graduate students may qualify.

Federal Supplemental Education Opportunity Grant

The Federal Supplemental Education Opportunity Grant is also awarded by the federal government based on need. Priority is given to students who demonstrate exceptional financial need.

4) Ask the College

You may qualify for a scholarship directly from the college you plan to attend. Often the college will have donors that provide scholarship money. At my college, completing the FAFSA was the first step in applying for these scholarships. Some scholarships require a short essay or demonstration of interest in a particular major.

5) Serve with AmeriCorps

Serving for 12 months in AmeriCorps will qualify you for the Segal AmeriCorps Education Award. This award may be used to pay education costs at eligible post­secondary educational institutions (including many technical schools and GI­-Bill approved educational programs), as well as to repay qualified student loans.

6) Qualify for the GI Bill

Serving your country will qualify you for the Montgomery GI Bill. You can also qualify for funds if you have a parent or spouse in the military with unused Post 9/11 GI Bill benefits. These funds do have to be repaid and can be used for tuition, fees and supplies, as well as housing.

7) Try Professional Organizations

There are professional organizations that offer monetary awards if you demonstrate interest in a particular career path. For example, the American Marketing Association Foundation awards several scholarships, and the National Association of Black Journalists awards scholarships to foreign or American-born students pursuing careers in journalism.

There are many ways to secure free money for college. It will take a little effort but it is worth it. Take the time to research these ways to finance your college education and chase the degree you’ve been dreaming about.

Disclosure: This post was written as part of the University Of Phoenix Versus Program. I’m a compensated contributor, but the thoughts and ideas are my own.

Originally posted 2014-10-30 13:00:23.

Categories
Budgeting & Saving

3 Ways to Save Money on College Expenses

There is no doubt that college is a large expense. It requires an investment of time and money. However, your college studies don’t have to break the bank. Here are three simple ways to save money on college expenses.

Shorten Time in College

Decreasing the number of semesters that you are in college is one of the best ways to save money on college expenses. Take more classes each semester or quarter. If you can take just one extra class, that could save you hundreds of dollars over the course of your college career.

If you are not able to take more classes, then choose to take classes during the summers or during mini­sessions. For example, my college offered courses during May­Mester. That is the two weeks between spring classes and fall classes. My brother’s college was set up a bit differently and he was able to take classes back-to-back in quarters.

Borrow Computer Time

These days, much of your coursework will be completed with some sort of online component. I remember a class where we met twice during the semester for a midterm and a final. The remaining class work had to be submitted via an online classroom. With that in mind, you should think about saving money on a desktop.

The most inexpensive way to complete online coursework is through your local public library. However, when the library closes, your access to the computer also ends. Look into inexpensive deals for laptops or desktops. An investment of 300 dollars is certainly worth it when you think about how it helps you to graduation!

Rent College Textbooks

On the first day of classes, the professor typically mentions the required course book. After I researched the price of the textbook, I almost popped a vein. Textbooks can be very expensive! However, I was able to cut costs by renting textbooks. There are many services that will allow you to rent a textbook for a fee. Then, when the semester is over, you simply return the book. You can also look into borrowing the textbook from a friend who has taken the course previously.

Learning to hack your expenses is an informal college class. It won’t be a grade listed on your transcripts, but you will certainly be tested on it in the real world. Figure out where you can trim expenses and make the most of your education dollar.

What about you? How did you hack your college expenses? Is there a suggestion that I missed?

Disclosure: This post was written as part of the University Of Phoenix Versus Program. I’m a compensated contributor, but the thoughts and ideas are my own.

Originally posted 2014-10-16 13:00:51.

Categories
Budgeting & Saving

Millennials & Money: Who does Gen Y Trust?

Picture this: you're 26 years old and have just received the first significant bonus of your blossoming career. You're trying to figure out how you might spend the money: should you travel or go on a shopping spree? Take in a weekend music festival with friends? On the other hand, you may be thinking about making a dent in the debt you've accumulated—or even considering putting a portion away to benefit your financial future. So, who can you turn to for solid financial advice?

According to Fidelity Investments' first-ever Millennial Money Study, far too many Millennials (aka Gen Y, born 1980-1989) struggle to answer that question. When asked who they trust most for information on money matters, one third (33 percent) of Gen Y-ers identify their parents as the top choice, but almost one in four (23 percent) indicate they trust "no one" when it comes to advice about money, making it the second most common response. (Note: Watch a video of Millennials sharing their fears and tips on handling their finances.)

Looking for more information on managing your finances? After checking out the posts, videos, and resources offered here at YoungFinances.com, check out Fidelity's MyMoney website. The web site has tools, videos and a wealth of resources targeted to people at the early stages of their investing lives, helping them tackle financial challenges and build plans for the future.

Millennials, do you really trust no one? Or are you just looking for a trustworthy institution?

Originally posted 2014-10-13 16:27:46.

Categories
Budgeting & Saving

Could You Spend 1 Billion Dollars? You Can’t. Here’s Why.

Is it really possible to spend one billion dollars?

I was listening to the latest GrowthEverywhere podcast (discovered earlier this morning via Growth Hackers) where they interviewed Emerson Spartz, a 27 year old middle school dropout. He homeschooled himself, started the number 1 fan site for Harry Potter fans, and today, across his various media properties, garners 160 million monthly page views.

In the interview, he mentions his financial goal. He wants to earn 1 billion dollars by the time he turns 30.

That's right, 1 billion dollars.

That made me think. Does he want one billion dollars because he needs the money?

Of course not.

At some point, you earn enough money to support yourself, to give, and to buy a few toys.

I believe that his desire to reach one billion dollars is simply a 'can I do it?' goal.

He likely wants to figure out if he has the mindset and mental capability required to earn one billion dollars. He's already earned one million.

He has an above average mindset.

The mindset required to earn one million dollars is completely different than the mindset required to earn the average American household income of $51,000.

It has to be.

Otherwise, more Americans would be earning one million dollars, right?

But the mindset required to earn one billion dollars is not much different from the mindset to earn one million dollars.

It is simply a three zero difference.

If you think earning one million is impossible and earning one billion is impossible, then figuring out how to earn either one requires roughly the same mental effort, correct?

Impossible = Impossible

If you disagree then I would challenge you to search and find the definition of impossibler.

Exactly. It's not a word.

So with that in mind, I tried to figure out what Emerson Spartz would do with one billion dollars.

We've already established that no one really needs one billion dollars. Heck, people survive everyday under the poverty level.

My fiancé and I agreed that it is not about the money. He even argued that no one could easily spend one billion dollars without wasting money.

I disagreed, stating that I could spend one billion dollars easily.

So he came up with a challenge.

How Would I Spend One Billion Dollars?

The challenge is this. Spend one billion dollars. Every single cent.

The conditions: I have to spend it on myself. No donating, no buying investments, none of that. I mean, if I made one billion dollars the first time, starting from zero, I could certainly make it again.

Donald Trump is living proof. He has been bankrupt and earned it all back and more.

Richard Pryor's character in the movie Brewster's Millions faced a similar challenge. He had to spend a $30 million inheritance in 30 days.

 

 

Faced with this challenge, someone who has never had that much money would find it difficult to figure out how to spend it.

I disagree. I think I could spend one billion.

Once I started looking for ways to spend one billion dollars, I realized that I had to dream big. Really big.

Here's how I would spend one billion dollars.

1) Purchase a home ($125 million)

Could You Spend 1 Billion Dollars? It's Easier Than You Think. | Young Finances

The Maison de L'Amitie is a home in Palm Beach, Florida. I chose it because it is off the coast of Palm Beach, one of the most beautiful areas in Florida. The garage has space for 50 cars. However, I would only need enough space for one.

2) Purchase a diamond encrusted Mercedes Benz ($4 million)

Could You Spend 1 Billion Dollars? It's Easier Than You Think. | Young Finances
This car was rumored to be the possession of Saudi Prince Alwaleed. An article from Business Insider claims that the car is not his. Well, now that I've purchased it, it's mine.

3) Purchase an island. Two to be exact. ($29.5 million + $43.3 million)

 

Could You Spend 1 Billion Dollars? It's Easier Than You Think. | Young Finances
This is a private island off the coast of Greece. It is non-devloped and only a 30 minute speed boat ride to Athens. The listing price is approximately $43.3 million USD. That seems reasonable.

Could You Spend 1 Billion Dollars? It's Easier Than You Think. | Young Finances
This is a private island in the Caribbean sea. It is also an undeveloped island and a part of the US Virgin Islands. The island is only five miles from Cyril E. King International Airport, making it accessible to commercial and private jet air service from around the world. Which brings me to my next purchase.

4) Purchase a jet ($100 million)

Could You Spend 1 Billion Dollars? It's Easier Than You Think. | Young Finances

This jet is on the more conservative side. I could have spent 600 million on an Airbus but I decided to budget my money for the islands. (budget, ha!) This Boeing 757 jet is one that Donald Trump is selling. Obviously I would have to get a new paint job.

5) Purchase a yacht ($263 million)

Could You Spend 1 Billion Dollars? It's Easier Than You Think. | Young Finances
This yacht is said to be owned by Russian billionaire, Alisher Usmanov. It is one of the largest yachts in the world and requires a crew of 47 people.

Whew! I'm exhausted. But I've only spent $564.8 million! It was really hard for me to figure out how to spend the remaining $435.2 million.

But here is how I would do it.

6) Develop two islands. ($36.5 million X 2)

Now that I have two islands, I have to develop them. I need roads and other infrastructure as well as a resort home to live in when I visit. I'll also build private resort residences for friends or anyone that is willing to rent them out. This may break one of the rules because it would qualify as an investment property. However, as a condition of purchasing Necker Island, Richard Branson was required to develop a resort so I am going to assume that I have to do the same.
Richard Branson paid $10 million dollars to develop Necker Island. That was in 1978. Using this inflation calculator from the US Bureau of Labor Statistics, I calculated that in today's money, 10 million dollars is equal to roughly 36.5 million.

7) Hire a private pilot for a 10 year contract term. ($2.1 million)

FindaPilot.com is a service matching pilots to job postings. One job posting listed the monthly compensation for a Boeing 757 pilot operator at $17,460. One year's salary is really just a drop in the bucket so I extended the term over 10 years. This assumes that the entire compensation package is covered by the contract salary.

Ok, I'm almost tapped out by now. At this point, I'm just looking for ways to get rid of the remaining $360 million.

8) Buy a life for 12 million Candy Crush users ($207.8 million)

How many times have you gotten a request from a friend on Facebook asking you to send them a life in Candy Crush?

I've heard the game is addicting.

 

Could You Spend 1 Billion Dollars? It's Easier Than You Think | Young Finances
After the first few requests I blocked the app, but maybe I could finally give them a life. The company reports that approximately 12 million users spend an average of $17.32 a month. I'd be willing to buy a life or power up or whatever it's called for each of them for one month.

9) Fritter away the remaining funds on unnecessary objects ($152.2 million)

Earlier this year, Oprah raised over $600 million auctioning off some of her most prized possessions. She decluttered and went back to the basics. Oprah is a billionaire but for her, less is more.

Now that I have completed this exercise, I can honestly say, I would have a hard time spending a billion dollars.

Yes, my fiancé was right.

Now I challenge you. Could you really spend one billion dollars? How would you do it?

Was it a fun exercise to try to find ways to spend money?

How are you spending the money you have now? Would your spending habits change if you had a billion dollars?

Originally posted 2014-10-12 15:52:33.

Categories
Budgeting & Saving

What Should I Do With My Old 401k?

How long have you been with your employer? And how long do you plan to stay there? As a millennial, you may have a feeling of restlessness. An article from Forbes argues that job hopping is the new normal for millennials. And the most recent data released by the Bureau of Labor Statistics states that employees tend to stay with their current employer an average of 4.6 years.

If you have been with your company for a few years, you are probably thinking of that next step. It is important to continue to grow your career and stretch yourself in the process. You may decide to continue your education and go back to college or start a professional certification. Maybe you are thinking of taking some time off to travel and discover what you truly have a desire to do. It is possible that you've realized that you can support yourself with your side hustle and you are ready to become a full time entrepreneur.

Free Money

During your time with your employer you have likely contributed to the retirement plan. If your company offers a match program for retirement contributions, you likely contributed to take advantage of the free money.

Staying with your employer? Click here to watch why free money should make you dance.

Now that you are thinking of leaving, you wonder, “What happens to all of that money in my 401(k)?”

Don’t panic.

It’s your money. And you can take it with you.

And that’s where the Rollover IRA comes in.

The Rollover IRA

As an avid reader of Young Finances, you've heard of the Roth IRA and the Traditional IRA. You know that IRA stands for Individual Retirement Account and that it is a savings vehicle designed to help you save for retirement. You know that you will need to designate a beneficiary and that I have a preference when it comes to tax free money.

But I have yet to mention the Rollover IRA.

A Rollover IRA, also known as rollover, is simply a transfer of funds from a retirement account such as a 401 (k) into a Traditional or Roth IRA.

Let’s assume that you have already left your job. Starting a rollover will allow you to move assets from a 401(k) at your old employer into a brand spanking new IRA, Traditional or Roth. In essence, you would contact the administrator that holds your 401(k) and let them know that you want to rollover. They would close out your 401(k), cut you a check and you have 60 days to deposit that into an IRA account that you open.

The Rollover Tax Question

Of course, when dealing with retirement distributions, you have to consider the tax implications. Let’s see what the Internal Revenue Service has to say about it.

Will taxes be withheld from my distribution?

IRAs: IRA distributions paid to you are subject to 10% withholding unless you elect out of withholding or choose to have a different amount withheld. Withholding does not apply if the distribution is paid directly to another IRA trustee.

Retirement plans: A retirement plan distribution paid to you is subject to mandatory withholding of 20%, even if you intend to roll it over later. Withholding does not apply if you roll over the amount directly to another retirement account. A distribution sent to you in the form of a check payable to the receiving plan or IRA is not subject to withholding.

Well there you have it. Directly from Uncle Sam himself.

Tax withholding can be avoided if you roll over the distribution from a retirement plan directly to another retirement account.

You may also be thinking, why should I roll over?

Why not take the distribution, pay the tax penalty and buy a yacht to travel the world?

When you roll over a retirement plan distribution, you generally don’t have to pay tax on it until you withdraw it from the new plan. By rolling over, you are saving for your future and your money continues to grow tax-free.

If you want to allow your money to grow tax-free then a rollover may be right for you.

Ready to Rollover Your IRA?

I've discussed Betterment here at Young Finances several times. I have a Roth IRA with them and a few sub accounts dedicated to travel, long term investing and a recent investing challenge. I like them because they provide an easy way to invest with low costs. Betterment portfolios are customized based on your personal preferences and risk tolerance and they work around the clock optimizing returns at every level of risk.

It’s free to roll over 401(k) assets or an IRA to Betterment. There are no trading costs and portfolios contain cost-efficient index funds.

They make things easy.

To transfer your 401(k) assets, the direct rollover method is used which prevents any withholding or tax consequences.

Betterment also provides a rollover concierge to you and they are available to speak to your current 401(k) or IRA provider to make sure the transition of assets is completed smoothly.

Not rolling over? Open a Betterment account today and get a month free.

Something that could take days and tons of paperwork is made easy with Betterment. Instead of an overwhelming, time-consuming process, Betterment takes steps to ensure your money is put to work in an optimized portfolio as soon as possible.


Now that you know how easy it is to roll over, what job will you look for next? Or would you rather take a year to travel the world?

Originally posted 2014-10-06 06:00:58.

Categories
Budgeting & Saving

4 Things You Should Save Up For Before Moving Out

You got your first taste of freedom when you went away to college, and you got to live either in the dorms or off campus apartments.

After graduation, the thought of moving back in with your parents was probably cringe worthy. But moving out on your own shouldn't be a decision you jump into quickly. You'll learn that being on your own is different than living away from your parents while you're in school.

You no longer have the same safety net, including borrowing money from mom and dad, or using financial aid to hold you over between your part time checks.

Before you pack your things yet again, here are 4 things you should save up for before you move out on your own:

Your rent deposit

Depending on where you rent and who you rent from, you'll probably have to put a deposit down to reserve your living space. In some cases it can be first and last month's rent, and in other cases, it's another fixed amount.

You'll want this money set aside before you tell your parents you'll see them later. I've rented several times, and two of those times, I've had to borrow money for my deposit from my mom, which was embarrassing.

Before you sign a lease or rental agreement, be sure to save at least two month's worth of rent for your deposit. Yes, there's a possibility to get that money back at the end of your living arrangement, depending on the conditions you leave your space.

However, there are some landlords who are notorious from keeping a large portion of your deposit, no matter how clean you leave your place. Don't rely heavily on getting 100% of that money back.

Expect 50% just so you won't be disappointed.

Rent reserve

Bottom line, things happen. Sometimes your check is shorter than you anticipated, or maybe an unexpected expense comes up.

When you're renting, either from a private landlord or a property management company, you'll soon learn how important the first of the month is. You always want to pay your rent on time, so you should save up for a backup rent resource.

This should be anywhere between one month to three months worth of rent.

This money will hold you over in rough times when you find yourself running short and the beginning of a new month approaching.

Home emergency fund

Although landlords and owners typically take care of repairs when you're renting, there may be situations where something is not covered, and you'll have to come out of pocket.

You should save money for home based emergencies. In my first apartment, our garbage disposal broke because a shot glass fell down the drain (don't ask). It wasn't covered in our rental agreement, but we were lucky enough to get the maintenance person to replace it for free.

This money can be used if you need to call a locksmith (they can be expensive), or fixing an after-hours emergency because the maintenance person was off the clock.

Another tip: get renter's insurance! It's good to have in case your items are damaged or stolen.

Moving expenses

When the day comes when it's time for you to move, it can be stressful and expensive if you don't plan ahead.

If you're moving into a one bedroom apartment, you probably don't need to hire movers. However, you might decide movers are within your budget. Check different companies' hourly rates and minimum moving prices.

You should also consider the expenses you don't typically think about, such as stocking your cabinets and refrigerator from scratch, utility deposits, and furniture delivery.

Living on your own is a very freeing accomplishment, but it's independence at a cost.

You can move without saving for all of these things, but you'll learn the hard way, like I did, that living away from home is a shock to your wallet.

You can deal with your parents for a couple more months while you save up for these things before packing your bags.

Originally posted 2014-08-27 06:00:42.